National Coal hires firm to evaluate merger, other alternatives

National Coal Corp. said Tuesday it has hired a financial advisor “to evaluate possible strategic and financing transactions,” including merger with other coal producers.

Other financial alternatives the advisor will study are restructuring National Coal’s debt, issuing stock in exchange for debt and selling stock for cash, National Coal said in a press release.

The Knoxville coal company also reported Tuesday that it swung to a profit of $248,967, or 3 cents per share, for the quarter ended June 30, a substantial improvement from a loss of $6.3 million, or 75 cents per share, a year ago.

Revenues from continuing operations were $10.6 million on the sale of 117,017 tons of coal, compared to revenue of $22.6 million on sales 290,508 tons of coal in the second quarter last year.

The decline in revenue reflects coal sales assigned to Ranger Energy Investments LLC as part of National Coal’s sale of assets.

“This was an important quarter for us as we took significant steps to strengthen our balance sheet, and successfully tackled a number of short term challenges. We are beginning to see the positive effects of these changes, namely in the improvement of our net income and EBITDA (Earnings Before Interest, Taxes, and Depreciation and Amortization) figures. In addition, we are moving ahead with the startup of our mine 12 operations,” President and CEO Daniel A. Roling, said in a statement.

National Coal reported adjusted EBITDA of $3.4 million in the second quarter, up from $1.2 million in the same period last year.

Assets National Coal sold in the second quarter include:

-- A preparation plant and rail loadout facility located in Devonia, Tenn. an active underground mine, two inactive mines, related property, plant and equipment, coal inventories located on the properties, associated permits, and a coal supply agreement for $11.8 million.

-- Ashort line railroad which served the New River operations for $3 million.

-- An idle Superior Highwall Mining System for $4.1 million.

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